Wednesday, January 13, 2010

Rob McEwen is one of the most well respected professionals in the precious metals business. He built Goldcorp into one of the world's biggest gold mining companies, with the lowest mining cost per ounce. Now he runs the junior exploration mining company, U.S. Gold. When I first got into this sector over 8 years ago, Goldcorp was a $2 stock. It's now over $40 and pays a monthly cash dividend. I think it's safe to say that McEwen's views should at least be taken into consideration and respected.

Rob was interviewed on Bloomberg yesterday and said he believes gold will hit $2000/oz in 2010 and eventually hit $5000/oz. in the 2012-2014 timeframe. I know a few years ago McEwen was the first visible mining executive to call for $1000 gold. This interview is short and worth watching (kudos to Ed Steer at Ed Steer's Gold & Silver Daily): VIDEO LINK

12 comments:

Dave have you seen Bill Still's documentaries, The money masters and Secret of Oz? I agree with him that switching over to a pure gold backed currency would be a terrible move at this point in time, mainly because never before has the world's gold wealth been so concentrated in so few hands; namely the Rothschilds. Putting my personal gold bug biases aside I have to agree with him, that its not what backs our currency but who controls its supply.

anliu - have not scene Still's work, but there's certainly some merit to that idea. I don't know what the final solution will be, but it should include gold as part of the equation. Clearly, Governments can't be trusted to operate w/out a currency anchor.

@Anonymous: I don't know. When McEwen took it public a couple years ago it zoomed up to like $8 because of his reputation. I haven't really looked closely at it and I do not own it so I can't speak intelligently as to the fundamentals. I did do a "drive-by" look at it several months ago and it looks like there's potential.

Au/Ag still looking resilient, but so is this market rally. INTC beating earning big (and a increase of 10X 40 cents/share vs 4cents/share a year ago!? Hows that happen?) will probbaly drown out all the other bad news.

gyc, i don't even bother looking at INTC's numbers anymore. there's so much channel-stuffing going on in the tech industry that it's impossible to tell for sure what's real and what isn't. I didn't look at the news release, but unless they're selling a lot of product in Asia the numbers are bullshit. You see the retail sales numbers? Strip gasoline inflation out of that and they were a complete disaster. people were'nt loading up on computers in thsi country.

they may have gotten a boost from selling netbooks. but another trick they do, and i've seen pics of this, they recognize sales when a shipment leaves port on a ship, so what they do at the end of the qtr is load up a lot of "slow boats to China" and that product is counted as sales.

The economy is absolutely collapsing. My buddy told me his parents were in Atlantic City earlier this week for an annual mid-week trip to Harrah's because they get a comp room and they said AC was an absolute morgue. They've never seen it like this. Gaming is a direct barometer of economic health.

Dave,my favorite quip from the INTC CFO:"Smith said Intel had not yet seen signs that big companies are feeling freer to replace their old PCs, but that he expects it to happen this year."Well I have been "expecting" to win the lottery for a while now but no dice! At least he is CONfident.

Oh yeah,FNM/FRE bailouts to cost more than Iraq and Afghanistan combined.

Eric Arthur Blair aka George Orwell

"Hope" is not a valid investment strategy

Full Time Jobs Over Last 5 Years

Is Your Gold Missing?

Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Epic Quote - "Jesse" Sent This To Me

"The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title." - Anonymous

The Basic Fundamental Problem

What's the solution?

“THERE IS NO MEANS OF AVOIDING THE FINAL COLLAPSE OF A BOOM BROUGHT ABOUT BY CREDIT EXPANSION. THE ALTERNATIVE IS ONLY WHETHER THE CRISIS SHOULD COME SOONER AS THE RESULT OF A VOLUNTARY ABANDONMENT OF FURTHER CREDIT EXPANSION OR LATER AS A FINAL AND TOTAL CATASTROPHE OF THE CURRENCY SYSTEM INVOLVED.”

Ludwig von Mises – Austrian Economist (1881- 1973)

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie? JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

Priceless Quote From Richard Russell

On Larry Summers: This doofus practically ruined Harvard when he headed it. I can't think of a worse choice to be chief economic advisor. I wouldn't trust Summers to manage a Starbucks franchise.

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.

Quote of the Month

And very relevant in the context of yesterday's post about gold moving higher against all fiat currencies:

Just imagine what would happen if a mere ten percent of the money currently going into bonds were instead to go into gold. As in 1972, the real move has yet to begin.

- Murray Pollit, Pollit & Co.

A Picture Says It All...

www.moneyandmarkets.com

Golden ore samples produced by Eurasian Minerals

Undisclosed exploration site

The Next Reserve Currency?

1 oz. Chinese Panda

Guess who said this?

Rising prices of precious metals and other commodities are an indication of a very early stage of an endeavor to move away from paper currencies...What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment.

-Alan Greenspan, 9 Sep 2009

THIS is what REAL money looks like

1 oz. Gold Eagles

Alan Greenspan said what?

“Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

From "Gold and Economic Freedom" a 1966 Essay by Alan Greenspan

About Me

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for a large bank. I have an MBA from the University of Chicago, with a concentration in accounting and finance.
Currently I co-manage a precious metals and mining stock investment fund in Denver.
My goal is to help people understand and analyze what is really going on in our financial system and economy.